Oil behemoth BP and mining giant BHP Billiton led declines this morning as fears of a recession smothered news that the government would be injecting £50bn into the banking system in exchange for preference shares.
BP is currently down over 5 per cent to 422p and BHP is down 5.7 per cent to 29.90p per share.
F&C head of asset allocation Paul Niven says: “It is too soon to make strong conclusions over the long term impact of the move on the banks themselves but, in our view, we have now entered a new era for global banking.
“In return for taxpayers money the state will gain a level of control over their governance, pay, and lending practices. Regulation will increase markedly and controls on all elements of banking practices will rise.”